Nike has long been a household name synonymous with athletic apparel, but it seems that newcomer buy under armour shoes australia Inc (NYSE:UA) is becoming a viable threat to Nike’s status. Although Nike remains at the top, Under Armour recently muscled out Adidas to claim the number two slot for most popular sportswear company.
Even though Nike’s $98.41 billion market caps trumps that of Under Armour’s of $21.95 billion, Under Armour recently announced growth plans that are giving Nike investors reason to worry. On September 16, Under Armour announced an accelerated long-term net revenue target, revealing that the company anticipates revenue of $7.5 billion by 2018. This figure marks a compounded annual growth rate of 25% when compared to the company’s 2014 net revenue of $3.1 billion.
cheap under armour shoes CEO, Kevin Plank, commented, “The investments we have made and will continue to make are a testament to the extended runway of growth we see ahead and provide us with the confidence in raising our long-term net revenues growth rate target from +22% to +25%. Building off of the incredible consumer demand we are experiencing for the brand, we firmly believe we are just getting started in our pursuit to become not only the definitive performance sports brand, but a truly great global brand.”
Analysts have voiced both bullish and less-than-enthusiastic opinions on Under Armour. Last week, Morgan Stanley analyst Jay Sole maintained an equal-weight rating on the stock, noting that heavy investments limit margin growth in the near-term. However, Sole expects these investments “to deliver strong returns over time.” On the other hand, analyst Jon Kernan of Cowen reiterated his outperform rating on UA last week and raised his price target from $112 to $120, commenting that the company’s revised revenue forecast could be conservative.
Under Armour itself was an underdog in the field for a quite a while. CEO Kevin Plank founded the company in 1996 at age 23 and famously sold products out of the trunk of his car. The company picked up steam in 1999 after receiving product placements in two movies, and eventually went public in 2005. Is it fair to say that Under Armour has grown out of its underdog status? The company most recently reported quarterly revenue of $784 million in July; marking a 29% year-over-year increase. Although this is an impressive figure that demonstrates strong growth, it is dwarfed in comparison to Nike’s most recent quarterly revenue of $7.8 billion.
buy under armour shoes online CEO Kevin Plank does not seem worried or intimidated by Nike, commenting, “We’re incredibly bullish about the momentum of the brand, the athletes we have, the stable [figures]